It’s one thing to be able to do something; it’s another thing to be able to do it in the best way. In this blog, we discuss the best practices you can apply to your expense management to make it more productive.
Expense management is not just about following a specific set of processes; it’s also about following expense management best practices that make the job more efficient.
It’s difficult to accomplish something when not everyone is on the same page. This is why you should implement an expense management policy for the whole organisation. Be sure that the policy outlines the following:
Remember that both stakeholders and employees must be aligned with the policies to keep everyone on board.
In the world of finance, following accurate timelines is non-negotiable. Establish timeframes that both the company and the employees can agree on, and be sure that everyone strictly follows those timelines.
For example, employees must submit their expense claims on a certain day of the month (e.g., the 15th day of the month, the first Friday of the month, etc.) with complete information, receipts, notes, etc. Managers, on the other hand, must also review and approve reports promptly within a set timeline
That way, everyone follows the process and deadlines stated in the expense management policy.
Accountability is something we always hear in the finance industry—and for good reason! Your established policy and processes will only work when people are responsible and accountable for what they do.
For example, managers must know (and practise) the company’s expense policies and supervise their teams to ensure that everyone is following them.
Timely and regular audits are the best way to avoid fraud. When you conduct expense management audits, you identify areas that need improvement and spot discrepancies that need your attention. Audits can also help you identify which items may be unnecessarily increasing costs.
You want to spot issues as early as possible, so we recommend doing regular audits instead of reviewing only at the end of the year.
Expense management doesn’t have to be complicated. Make the process simple by streamlining it with a clear policy and expense management software that will make the work easier, quicker and more efficient for you.
When you issue company cards to your employees for work-related travel and other business expenses, you get to impose spending limits. This lets you know the exact amount of the refunds that will be processed while the employees are out for business.
We recommend using virtual cards for a more convenient process for both the employer and the employees.
An expense management software can speed up processes, flag any issues and generate reports without the hassle. It plays a pivotal role in digitally transforming your business spend management practices, allowing you to be more efficient and proactive.
The expense management tips and practices we mentioned above don’t just simplify your work; but also solve some finance issues that otherwise may be overlooked, missed or inaccurately recorded. These issues may include the following:
The lack of a clear policy leads to miscommunication between employees and employers. For example, if you don’t have a clear policy that outlines the unacceptable expenses, the employee may argue that it should be allowed, causing issues and unnecessary back and forth between the two parties.
Old-school expense management, which involves manual expense reporting, can lead to human errors that inevitably lead to losses. Examples of human errors include missing to hit that final zero in the figure that you’re typing or losing a business expense receipt!
With automation, you can be confident that data is properly recorded and analysed, and errors, if any, are properly flagged.
Expense management best practices such as the issuance of corporate cards, a clear expense policy and automated reports can increase visibility and promote a transparent culture within the company, thus reducing the risk of fraud.
While both the employees and finance teams play an important role in expense management, CFOs, in particular, play a key role in digitally transforming expense management practices to drive better results. The CFO must establish the need and emphasise the benefits, which include:
With the right expense management solutions and practices, organisations can minimise fraud such as overstating business expenses, processing fraudulent records and other issues that can be avoided through proper policies and supervision.
Expense management best practices can manage cash flow efficiently and effectively because you get to see who spends on what and how much. You get to proactively control expenses to avoid any abuse of the system.
Proper processing and auditing can help the organisation accurately budget and forecast for the future, which is a helpful element both now and in the long run.
These expense management best practices improve not just internal processes and reports, but also external operations and the way your business deals with expenses.
Thinking of using automated expense management software to make your work easier? Book a demo with us to check it out.